San Diego has some of the strongest rents in the country and some of the highest prices, and the gap between the two is the whole story for a DSCR loan. Most San Diego rentals need a larger down payment, a second unit or a sub-1.0 program to make the ratio work.
In short: Yes. LendingStreet finances DSCR loans on 1-8 unit rentals in the San Diego area, qualifying on the property's rent with no W-2s or tax returns, LLC borrowers welcome and a 620 minimum credit score. Loans start at $150,000 with no stated maximum, purchases go up to 80% LTV and cash-out refinances up to 75% LTV. Price relative to rent, the city's short-term rental license caps, local tenant protections and Prop 13 reassessment are the San Diego items to plan for.
North Park, City Heights, Normal Heights, Hillcrest and University Heights have older homes, duplexes and small apartment buildings close to downtown. Clairemont, Linda Vista and Serra Mesa have mid-century homes, and Pacific Beach and Mission Beach lean toward vacation rentals under tight rules.
Outside the city, El Cajon, La Mesa, Lemon Grove, Spring Valley, National City and Chula Vista have more multi-unit buildings and lower prices. North County, including Oceanside, Vista and Escondido, rents to families and military households tied to Camp Pendleton.
| Area | Typical rental stock | What to check |
|---|---|---|
| North Park, City Heights, Normal Heights | Duplexes, older homes with ADUs, 5-8 unit buildings | Tenant protections, condition |
| Clairemont and Linda Vista | Mid-century homes | High prices relative to rent |
| El Cajon, La Mesa, National City | Duplexes and small apartment buildings | Rent comps, local rules |
| Oceanside and Escondido | Single-family homes, some duplexes | Military demand, wildfire exposure |
At typical San Diego prices, a single-family home bought at 80% LTV rarely reaches 1.0x on long-term rent. Investors respond in a few ways: putting down 30% to 40%, buying duplexes and small buildings that qualify on combined rent, adding a legal accessory dwelling unit, or using a sub-1.0 DSCR program.
Because balances are large, many San Diego loans are in jumbo territory, where maximum LTV can be lower and reserve requirements higher, varying by program. Buildings with 5 to 8 units are still residential DSCR loans, and San Diego has many of them in older neighborhoods.
Under Prop 13 the property is reassessed to the purchase price at sale, with a base tax of about 1% of assessed value plus local bonds and assessments. A long-held property can carry a much lower bill than you will pay, so budget on your purchase price.
Newer communities in eastern Chula Vista, Otay Ranch, San Marcos and other areas often carry Mello-Roos special taxes, which count in the payment. San Diego County charges a documentary transfer tax on the sale. Ask the escrow and title company for figures.
East County and inland North County face wildfire exposure, and some carriers have pulled back, pushing owners to the California FAIR Plan plus a separate policy. Coastal properties can face flood and bluff issues. Get quotes early because the premium is in the payment.
The City of San Diego requires a license for short-term rentals and caps whole-home STR licenses at about 1% of housing units citywide outside Mission Beach, with a separate, larger cap in Mission Beach. Licenses are limited and allocated by lottery and waitlist, so do not assume a newly purchased home can operate as an STR. Other cities in the county have their own rules.
California's statewide rent cap and just-cause rules under AB 1482 apply to many units, and the City of San Diego adopted its own tenant protection ordinance with stronger just-cause and relocation rules. Underwrite on current rents and confirm what applies.
This example is illustrative and not a quote. An investor buys a duplex in El Cajon with both units leased at current market rent.
The purchase price is $1,050,000 and the rent is $5,600 a month. At 75% LTV the loan is $787,500, so the down payment is $262,500 before closing costs. Estimated principal and interest on a 30-year loan comes to about $5,372, and taxes and insurance add $1,145, for a total payment of about $6,517. Rent divided by that payment gives a DSCR of about 0.86x, below the 1.0x standard minimum.
At 60% LTV the loan drops to $630,000, the payment falls to about $5,443 and the DSCR rises to about 1.03x. The investor brings $157,500 more to closing, which is the usual trade in a market where prices run high relative to rent.
| Item | 75% LTV purchase | 60% LTV purchase |
|---|---|---|
| Purchase price | $1,050,000 | $1,050,000 |
| Loan amount | $787,500 | $630,000 |
| Estimated principal and interest | $5,372 | $4,298 |
| Property taxes | $965 | $965 |
| Insurance | $180 | $180 |
| Total monthly payment | $6,517 | $5,443 |
| Monthly rent | $5,600 | $5,600 |
| DSCR | 0.86x | 1.03x |
The loan qualifies on the debt service coverage ratio: monthly rent divided by the full payment, including principal, interest, taxes, insurance and any HOA dues. Standard programs look for 1.0x or higher, and sub-1.0 programs exist for properties that fall a little short.
Duplexes, triplexes and fourplexes qualify on the combined rent of every unit. Buildings with 5 to 8 units are still residential DSCR loans, though maximum LTV can be lower and varies by program. For 9 or more units, see our commercial multifamily options. The same terms apply statewide; our California DSCR page covers the rest of the state.
Send the address, price or estimated value, the rent and the leverage you want. Our investor loans are business-purpose loans on non-owner-occupied property, and the financing team will run the ratio at a few loan amounts and come back with options. Use the form below or call (877) 298-1001.
Yes, but the ratio is tight. Many investors put more down, buy multi-unit properties, add a legal ADU or use a sub-1.0 DSCR program.
Only with a license, and whole-home STR licenses are capped and allocated by lottery. Do not assume a new purchase can get one.
A permitted ADU with its own lease can add rent the appraiser counts. Unpermitted units generally do not.
Many are, because of local prices. Larger balances can mean lower maximum LTV and higher reserves, varying by program.
No. The loan qualifies on the property's rent. You still need a 620 or higher credit score, reserves and entity documents if you close in an LLC.
Yes, up to 75% LTV, as long as the rent covers the new payment at the program minimum. Seasoning requirements vary by program.
Purchases go up to 80% LTV, so at least 20% down plus closing costs and reserves. Larger balances and 5-8 unit buildings can require more, and that varies by program.
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